Caixin
Nov 29, 2016 01:53 PM
BUSINESS & TECH

Didi Abandons Global Uber App in China

(Beijing) — The universal version of Uber's app in China has been replaced by a new edition that operates solely in mainland China.

Four months after Didi Chuxing made its landmark acquisition of Uber's operations in China, Uber China has been severed from the international ride-sharing company it had branched from.

On Sunday, users who were still using the earlier version of the Uber app were moved over to the new one, the iOS version of which is developed by Didi Chuxing.

Abandoning the original global app is a sign that Didi is steering toward total integration with Uber, said Zhang Xu, an analyst at consulting firm Analysys. "This shows that Didi wants Uber China to be independent from its former international parent, and to resemble Didi more."

The new home-grown app will also give Didi more control over Uber's marketing and promotion in China, Zhang added.

Although Uber's app remains separate from Didi's, the new app, introduced a month ago, shares backend data, which means that trip requests sent from passengers using either Didi or Uber reach the same pool of drivers.

Anti-monopoly lawyer Wei Shilin warns that the decision to fuse the two apps backstage is jumping the gun because the deal is still pending review from regulators, who will decide whether the merger requires a go-ahead from antitrust authorities.

One key criterion when assessing whether the deal is subject to scrutiny from antitrust authorities is "actual control over the acquired company," said Wei, director of the Antitrust Committee in Beijing's Lawyers Association. "If the two are sharing the same backstage, it makes it hard to argue that Didi does not claim actual control," he said.

Wei added that even if Didi were to succeed in persuading regulators of Uber's operational independence, "backstage integration is essentially sharing of competitive information, which is another breach of anti-monopoly laws."

"Either way, this move could put Didi in a difficult position with the authorities," Wei said.

Didi states that sharing orders and drivers across two platforms will increase the number of drivers available and "enhance transport capacity," and slash waiting times and price surges, which have been on the rise as drivers drop out amidst slumping subsidies.

The new app caters to a domestic market rather than foreign travelers and short-term foreign residents. Users without a mainland cellphone number are effectively cut off from using Uber in China, and credit cards issued from outside China are no longer accepted. Didi said English-language functions are still in the pipeline.

Non-Chinese-speaking users complain that the new app contains huge hurdles. "Shutting off the English interface excludes many expats, but the other restrictions also cut Didi off from the market of people who are traveling to China for business or holidays," said Mike Shaw, a public relations professional in Beijing.

When Didi acquired Uber China in August, it promised the latter independent branding and business operations to "ensure stability and continuity of service for passengers."

Contact reporter April Ma (fangjingma@caixin.com); editor Kerry Nelson (Kerry@caixin.com)

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